The Loma Prietan
March/April 2002
Fair Trade: Why It Matters
by Rafael Reyes
This past December, the House passed by one vote a trade promotion authority (TPA) bill, HR 3005, sponsored by Bill Thomas (R-CA). The TPA, also known as "fast-track," establishes the framework and objectives of negotiations for multilateral "free" trade agreements, which at this point are focused on the Free Trade Area of the Americas, an expansion of NAFTA which would include Chile and possibly other Latin American countries in the future.
It empowers the White House to negotiate an agreement over which Congress will only be able to provide a "yes/no" vote to approve or reject it without additional review or amendment.
Why does the Sierra Club care about a trade agreement? Doesn't it seem a long way from issues such as clear cutting, pesticides, or climate change. Or are they related?
They are related very closely, it turns out. Trade agreements govern an enormous range of issues related to how commerce is conducted, including legal and regulatory schemes. And environmental protection is integrally related to our consumption patterns and how we manage them.
NAFTA and WTO have unfortunately
revealed real hazards in relation to safeguarding our environment and health. Perhaps the best known case is that of the carcinogen MTBE. This gasoline additive has been found especially dangerous in its capacity to seep into water supplies—a soda can's worth of MTBE will pollute an Olympic-sized pool— so much that California has moved to ban it this year. NAFTA, however, provides "investor safeguards" against "appropriation" so broad that a company can sue a government for any action deemed to be a trade barrier, even one deemed an environmental or health issue.
Under these rules, under Chapter 11 of NAFTA, Methanex Corporation of Canada, a producer of MTBE, is suing California for banning MTBE. The case is judged by a closed-door panel of three judges. As if this were not alarming enough, a similar case was already lost by Canada in its attempt to ban for health reasons another gas additive, MMT. In a suit brought by U.S.-based Ethyl Corporation, Canada was not only forced to pay $16 million in damages but it reversed the ban. Other cases show similar results, including weakening of protection for turtles and dolphins under WTO, and forced acceptance of a toxic waste treatment plant by Mexico in a zone that Mexican authorities believed would risk groundwater supplies under NAFTA.
More cases exist. The recent fast-track bill that passed the House made absolutely no provisions for addressing these problems, setting the stage for the Administration to negotiate FTAA in such a way as to further erode our country's environmental protections. There is no limit to the protections that may be jeopardized under these rules.
In the aftermath of September 11 and a recession, the Administration and its allies in Congress argued that free trade is essential to getting our economy moving and providing economic development in the Third World, resulting in the removal of conditions that give rise to terrorism.
It is true that lack of economic opportunities provide an essential context for extremism and it is also true that our own economy needs attention. However, trade negotiations will take years to complete and so will have no impact on our recession. A properly structured trade agreement would have an equal or better impact on the highly complex causes of terrorism.
We must not allow the recent tragedy to cloud our ability to look on trade negotiations with a critical eye. Peninsula and Silicon Valley representatives should be applauded for opposing the TPA, which provided no safeguards. As Mike Honda noted in a constituent letter, "On the environment, the Thomas bill largely ignores the lessons learned under NAFTA's Chapter 11. Our nation must not be penalized for protecting our citizens and our natural resources."
Honda also notes that the TPA does not incorporate meaningful labor safeguards and sacrifices Congress' rightful oversight role.
The huge demonstrations beginning in Seattle in 1999, Prague in 2000, Quebec and Genoa in 2001 show the depth of dissatisfaction with globalization efforts in the form characterized by the Thomas TPA. Structured to address basic protections, globalization efforts would not encounter such broad resistance.
Likewise, the Sierra Club is not opposed to multilateral agreements that provide the means for increased trade. There are strong arguments in support of the view that increased trade increases the standard of living of all participants in the long run; however, much depends on the specifics of how such agreements are structured.
We must work to ensure that basic safeguards are not sacrificed. The next stop for the fast-track bill is the Senate some time in the coming year. This is a good time to voice your concern to Dianne Feinstein and Barbara Boxer as well as the Administration, demanding the need for adequate environmental protections in the final TPA.